The Federal Board of Revenue (FBR) has intensified its enforcement drive against tax non-compliance by issuing notices to 421 textile spinning units across the country for failing to install the mandatory Production Monitoring System (PMS), including advanced video analytics, commonly referred to as the “Digital Eye” system.
According to official sources, the notices were served on Friday as part of the FBR’s broader strategy to improve transparency in the textile sector, curb tax evasion, and ensure accurate reporting of production activities.
The tax authority has also decided to tighten regulatory measures against non-compliant units by withdrawing key incentives. Sources said the FBR is preparing to suspend the green channel import facility for defaulting spinning mills, a move that would subject their imports to stricter customs scrutiny. In addition, sales tax refunds of these units may also be withheld until they comply with the new monitoring requirements.
Officials revealed that only a small number of textile spinning units have taken practical steps toward compliance. Out of the 421 units that received notices, 12 have hired authorized vendors to install the production monitoring system. Among these, six units have successfully completed the installation, while another six are currently in the implementation phase.
However, the overwhelming majority of textile spinning units have yet to begin the installation process, prompting the FBR to prepare a series of strict enforcement actions.
According to sources familiar with the matter, the FBR has instructed its field offices nationwide to ensure full implementation of the production monitoring system and to take immediate action against businesses that continue to ignore the directives.
The proposed enforcement measures include blocking imports, imposing financial penalties, suspending or cancelling sales tax registrations, sealing business premises, blacklisting non-compliant units, and restricting the clearance of goods from production facilities. Officials warned that businesses showing continued resistance could face these measures without further delay.
The production monitoring initiative is part of the FBR’s ongoing digital transformation agenda aimed at electronically tracking manufacturing activities in the textile spinning sector. Through the use of video analytics, tax authorities intend to monitor production in real time, reduce the possibility of underreporting output, and improve revenue collection.
The textile sector is one of Pakistan’s largest industrial contributors and a major source of exports. Tax officials believe that the implementation of digital production monitoring will help establish a more transparent taxation system, ensure fair competition among manufacturers, and strengthen compliance with tax laws.
